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The collapse of the subprime mortgage market has created depression-like conditions in the housing market and driven the economy to the brink of recession, but many of those who call formore federal regulation fail to recognize that earlier and morecomprehensive regulatory efforts did little to deter housing marketproblems and in some cases may have made them worse.
The collapse of the subprime mortgage market in late 2006 set in motion a chain reaction of economic and financial adversity that has spread to global financial markets, created depression-like conditions in the housing market, and pushed the U.S. economy to the brink of recession. In response, many in Congress and the executive branch have proposed new federal spending and credit programs that would greatly expand the role of government in the economy but do little to alleviate the distress caused by the financial crisis that has spread rapidly to nearly all sectors of the economy.